Does debt bother you?

By Jan Dolcater | Mar 08, 2018

Although the economy is booming, I am concerned that most of the public is not aware of the current debt situation. After the 2008 crash of the housing market, which was brought about by banks and other lenders providing loans to individuals with little or poor credit, it appears that we are headed toward another financial crisis.

For the most part, the media has paid little or no attention to this reality, and neither does the public appear either to know or to care about it. IAccording to an August 2017 article that appeared on the MarketWatch website, August 2017, a report from the Federal Reserve stated that Americans had $1,021 trillion in outstanding credit card debt as of June of that year. This total exceeded the credit card debt of 2008. This time the lenders, instead of providing high-risk housing loans, have given many consumers with subprime or below average credit scores access to credit cards. Did we learn any lessons?

It is estimated that only one third of credit card holders pay off all of the prior month's charges, so it is obvious why this situation exists. In Maine, the average balance per household in credit card debt is in excess of $7,500. Where do you fit? Hopefully, you are not among the two thirds of debtors who pay only the minimum or less.

Another concern is student debt, which has reached an historic level. As reported in a story from December 2017 on the Business Insider website, the total today is $1.3 trillion and now exceeds the total of credit card debt. A serious problem with this category of debt is that defaults on student loans are higher than most of the other types of loans.

I hope that now that I have brought these facts to your attention, you will become aware and active in your community in focusing discussion on the debt levels in local, state and the national level. In regard to the federal budget deficit, far too many individuals simply fail to understand how this can and will affect their future. We can start a review of the rise in our federal deficit with President Ronald Reagan, who almost doubled the deficit by accumulating more than $1.4 trillion of debt. However, the largest increase in the deficit took place when President Barack Obama came close to doubling the debt from $10 trillion to just under $20 trillion.

The current Republican-led House of Representatives seems to understand the need to attempt to balance the budget. Unfortunately, with the lack of fiscal responsibility by weak-kneed Republicans and big government liberal Democrats in the Senate, the debt will increase again by more than $1 trillion in the next 10 years.

It is my belief that neither Sen. Mitch McConnell, who has been in the Senate since 1985, nor Sen. Charles Schumer, who has been in either the House or Senate for 38 years, has the commitment or judgment to pass a balanced budget. When you consider that neither of these men has ever held a private-sector job since their college years, it is understandable that they propose increased spending with little or no regard for fiscal responsibility.

I find it interesting that the states of Virginia and Maryland, which surround D.C., are two of the top three contiguous states with the highest levels of household credit card debt, with both states in excess of $10,000 of debt per person. There seems to be something about the atmosphere in this area that encourages accumulating unrealistic levels of debt.

It is important to note that the current federal discretionary spending accounts for only about one third of the federal budget, with the other two thirds being spent on Social Security, Medicare and Medicaid. Without major revisions in these entitlement programs, they are unsustainable. No government at any time has ever spent its way into prosperity. If the leadership of both political parties does not soon come to realize and act responsibly with this situation, our country, like all others before it, will plunge into disaster.

I encourage all who read this to press your legislators, whether Democratic, Republican or Independent, to come to grips with this situation and support a balanced budget now. If they pay no heed, it will only be a matter of time before the financial collapse of our nation will take place.

Comments (6)

Posted by: Ronald Horvath | Mar 18, 2018 07:40

Under Trump's watch, national debt tops $21 trillion for first time ever

"About a year ago, President Trump pledged to eliminate the national debt "over a period of eight years." But for the first time in history, the national debt surpassed $21 trillion this week, according to the U.S. Treasury.

The landmark comes shortly after Congress passed, and Mr. Trump signed, a suspension on the federal debt limit last month, allowing the government to borrow an unlimited amount of money until March 1, 2019."

Anyone that is not aware of the issues Jan brings up here must live in a cave in the back-country or stay glued to Fox News or Trump's Twitter feed. It's been steadily reported by all the mainstream news publications since Trump was put in the driver's seat by ill-informed voters who fell prey to the long-range misinformation campaign of the Right (in collusion with the Russians).

Part of the solution here is to "cut the cord" by getting rid of your network TV and just using internet news. Stay away from talking heads and media personalities for your news. On your browser, set up a "News" folder for links to a broad range of news sources, including NYT, Wapo, the Guardian, Al Jazeera, all the local news outlets, Townhall, National Review, Redstate, the Heritage Foundation, and, of course, Fox News. Understand that you will not agree with many of the opinions you read and facts presented, both Right and Left, and fact-check everything before you buy into it. Don't get yourself locked into any black-and-white positions, be open to question your own beliefs and change them when necessary.

Posted by: Ronald Horvath | Mar 11, 2018 09:50

Analysis: Government set to borrow nearly $1 trillion this year, an 84 percent jump from last year

“The federal government is on track to borrow nearly $1 trillion this fiscal year — President Donald Trump's first full year in charge of the budget.

That's almost double what the government borrowed in fiscal year 2017.

Here are the exact figures: The U.S. Treasury expects to borrow $955 billion this fiscal year, according to a documents released Wednesday. It's the highest amount of borrowing in six years, and a big jump from the $519 billion the federal government borrowed last year.

Treasury mainly attributed the increase to the "fiscal outlook." The Congressional Budget Office was more blunt. In a report this week, the CBO said tax receipts are going to be lower because of the new tax law.

The uptick in borrowing is yet another complication in the heated debates in Congress over whether to spend more money on infrastructure, the military, disaster relief and other domestic programs. The deficit is already up significantly, even before Congress allots more money to any of these areas.

"We're addicted to debt," says Marc Goldwein, senior policy director at Committee for a Responsible Federal Budget. He blames both parties for the situation.

" weak-kneed Republicans and big government liberal Democrats in the Senate," Dale? Why not just admit that your party is in control of the situation and deserves what ever blame you want to throw at them. (Oh, and Reagan TRIPLED the deficit, raised taxes to pay for SS and then used that money to pay for his tax cuts for the rich.)So, here ya go:

"Heritage Foundation: Republicans are “bankrupting the country”

"The conservative Heritage Foundation accused the Republican-controlled Congress of "bankrupting the country and robbing future generations of Americans to pay for it."

In an op-ed for The Hill, The Heritage Foundation's Thomas Binion wrote that a "debt crisis, and all the terrible economic effects of that, are looming." While he went on to claim that "both parties are guilty," both chambers of Congress are controlled by Republicans and have been since 2015.

"The Bipartisan Budget Act is 652 pages long. The bill increases spending by $386 billion over two years and nearly $1.5 trillion over 10 years. It also suspends the debt ceiling until after the next election."

President Donald Trump and the Republican party indeed unveiled a budget plan that knowingly increases the deficit, despite their phony concern for the deficit in recent decades. Except the Heritage Foundation is attempting to spin this on all of Congress, obscuring the role of the ruling party.

"Most Republicans are concerned about a real crisis of readiness in the U.S. military and are focused on getting the Pentagon the resources they need. After months of stalled spending negotiations, those Republicans are desperate and frustrated, and Democrats extracted a ransom," Binion wrote.

The reality is, the Republicans never actually cared about the deficit, and never have.

"Democrats didn’t even bother to make the case for any increase in domestic spending. They demonstrated not one single reason to increase domestic spending," he continued. "They don’t even have a private justification for the spending they wanted. They just named a price they thought they could get — and they got it."

But the deeply unpopular GOP tax plan, which was projected to increase budget deficits by roughly $1.5 trillion over the next decade, was fully supported and touted by the Heritage Foundation.

So now, the conservative think tank is only looking to sound the alarm on both the national debt and deficit by proposing that the federal government slash spending entirely. This is somewhat of a dream for House Speaker Paul Ryan, R-Wis., who vowed to gut Medicare, Medicaid and Social Security before the tax plan even reached President Donald Trump's desk."https://www.salon.com/2018/02/13/heritage-foundation-republicans-are-bankrupting-the-country/

And the only problem with SS is the politicians who stole from it.

"Reagan spent every dime of the surplus Social Security revenue, which came in during his presidency, on general government operations. His successor, George H.W. Bush, used the surplus money as a giant slush fund, and both Bill Clinton and George W. Bush looted and spent all of the Social Security surplus revenue that flowed in during their presidencies. So we can’t blame the whole problem on Reagan. Reagan was the one who figured out a way to use Social Security money as general revenue, and his successors just followed his example.

The $2.7 trillion, which is alleged to be in the trust fund, was all spent for wars, tax cuts for the rich, and other government programs. If the money is repaid at some point in the future, we could say is was just “borrowed.” But no arrangements have been made to repay the money, and nobody in government is suggesting that the money should be repaid. So, if it is never repaid, the money will definitely have been stolen."- See more at: http://www.fedsmith.com/2013/10/11/ronald-reagan-and-the-great-social-security-heist/#sthash.LckhuYLf.dpuf

"Yes. The Federal Government currently owes the Social Security Trust Fund $2.85 Trillion Dollars. That’s $2,850,000,000,000.

While the Federal Government has borrowed from the Social Security Trust Fund since it began, in 1983, President Ronald Reagan (a Republican) and Speaker of the House Tip O’Neill (a Democrat) came to an agreement to increase Payroll taxes allowing the Social Security Trust Fund to build a large surplus so they would have the funds to help pay the Social Security obligations to baby boomers when they retired.

Sadly, politicians in Washington couldn’t keep their hands off the money in the Social Security Trust Fund. While both parties have been quick to blame the other one for the raid of the Social Security Trust Fund, both parties have been equally to blame. Every year, the total balance in the Social Security Trust Fund has been transferred to the Federal Treasury and replaced with non negotiable bonds which are stored in a filing cabinet at the Bureau of Public Debt in Parkersburg, West Virginia. The interest on these bonds is “paid” by the issue of even more bonds.

The Federal Government will only have money to repay its obligations by raising taxes or radically cutting spending. In the words of Senator Mike Enzi “If the revenues are not there (and they will not be as long as the government continues to run budget deficits), then the federal government will have to raise taxes or cut other spending to finance promised Social Security benefits. This is gross financial mismanagement. We don’t have enough trust funds with money in them to satisfy the demands put on our government.”https://www.quora.com/Did-the-federal-government-borrow-from-social-security/answer/Dan-Perrin-3?ref=fb

And here's a quote that may explain the Republican attitude toward Social Security:

“Stephen Moore (senior fellow at the Cato Institute, contributing editor of National Review and president of the Free Enterprise Fund) wrote, "Social Security is the soft underbelly of the welfare state. If you can jab your spear through that, you can undermine the whole welfare state." - How Can the Richest 1 Percent Be Winning This Brutal Class War Against 99% of Us?, http://www.alternet.org/economy/149596/how_can_the_richest_1_percent_be_winning_this_brutal_class_war_against_99%25_of_us/

Another View is a column space shared by a group of concerned conservative citizens/writers, who meet regularly in the Midcoast to discuss important issues. The column has been honored with Maine Press Association awards.